New developments on regulation of cryptocurrency in China

Abstract

Purpose

To describe recent regulatory developments in China on digital renminbi (RMB), initial coin offerings (ICOs), cryptocurrency holdings, cryptocurrency exchanges and blockchain technology.

Design/methodology/approach

Describes a digital RMB pilot program, seven government agencies’ bans on ICOs and cryptocurrency exchanges, the legality of holding and trading cryptocurrencies in China and the government’s endorsement of blockchain technology.

Findings

No PRC law or regulation prohibits Chinese investors from holding or trading cryptocurrencies but Bitcoin is defined as a virtual commodity, not a currency. Despite a ban on ICOs and cryptocurrency exchanges, the People’s Bank of China (PBOC) and other government agencies endorse blockchain technology as long as its goal is to service the real economy.

Originality/value

Expert guidance from lawyer with experience in foreign investment, cross-border mergers and acquisitions, capital markets, fund formation and venture capital and private equity investments in China.

Citation

Shen, W. (2021), "New developments on regulation of cryptocurrency in China", Journal of Investment Compliance, Vol. 22 No. 2, pp. 133-136. https://doi.org/10.1108/JOIC-11-2020-0045